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Apple's streaming service is a 'major shot across the bow' at Netflix and Disney

Tim Cook, Apple CEO, announced today that new streaming service, Apple TV+ was going to be available for only $4.99 a month.

Cook also stated, during Apple’s special event at the company headquarters in Cupertino, California, that consumers picking up a new iPad, iPhone, or Apple laptop, would be receiving a free year of the subscription-based service.

The low price is catching the media and investing world by surprise.

“The pricing of Apple’s streaming TV service at $4.99 per month is a ‘show stopper’ and a major shot across the bow at the likes of Netflix and Disney among others,” market analysts Strecker Backe and Daniel Ives of Wedbush investment firm said in a joint statement.

Apple’s news comes on the heels of Disney’s big announcement at their special event D23 in Anaheim, California, of their own new streaming service, Disney+ with a higher price point of $6.99 per month.

Apple’s offer is the lowest of the major streaming content providers. Comparatively, Hulu offers streaming content starting at $5.99 a month and Netflix charges about $9 per month to access their online catalog of streaming movies, TV shows and other exclusive media.

Apple also world premiered its trailer for "See," starring Jason Momoa. The original series was produced exclusively for Apple TV+ subscribers. "See" joins "The Morning Show," which is another highly anticipated Apple original starring Steve Carell, Jennifer Aniston and Reese Witherspoon.

“The Street was anticipating a $7.99-$9.99 price point as clearly Cupertino is looking for market share coming out of the gates with these surprising price points that we loudly applaud,” Backe and Ives explain of the surprisingly low cost. “In our opinion, with an installed base of 900 million active iPhones worldwide, we believe Cook & Co. have an opportunity to gain 100 million consumers on the streaming front in the next 3-4 years.“

The market responded to Apple’s news with big hits to the major players. Shares of Roku were down 10.49% while Netflix was down 2.16% and Disney was down 2.19%. Because Apple also announced its new subscription-based gaming for handheld consoles, video game competitors also responded poorly with Take-Two Interactive down 2.85% and Sony dropping 1.23%.